A buyer's guide to S/4HANA Cloud Private Edition

What is S/4HANA Cloud Private Edition?

S/4HANA Cloud Private Edition offers users greater flexibility and control over the software than S/4HANA Cloud Public Edition, which is the entry-level version of S/4HANA Cloud.

Private Edition provides expanded functionality, a wider range of user interface options, and options for customization and third-party integrations. However, SAP requires a higher user count for Private Edition, and the software's increased complexity makes it more costly to operate.

S/4HANA Cloud Private Edition is appropriate for midsize and large enterprises whose leaders don't want to manage an IT infrastructure but require more options and flexibility than are offered through Public Edition.

Functional scope

Private Edition provides a much broader range of SAP features than Public Edition, with features including localization and best practices for 64 countries. The software is available in 39 different languages and offers vertical functionality for 25 industries.

Organizations can integrate S/4HANA Cloud Private Edition with SAP SuccessFactors Employee Central, which oversees HR; Fieldglass, which oversees vendor management; Hybris, which oversees e-commerce and CRM; and Ariba Network, which oversees procurement and supply chain management.

Extensibility

S/4HANA Cloud Private Edition is likely best for new SAP users who need more flexibility and functionality than Public Edition can provide and for larger, more complex organizations that require the full scope of SAP's ERP functionality.

As with Public Edition, developers can opt for side-by-side development in Private Edition and create cloud-based apps to run alongside S/4HANA. This approach is likely new for many veteran SAP programmers, but it helps developers extend S/4HANA functionality to very good effect. In addition, S/4HANA Cloud Private Edition permits ABAP extensions.

Private Edition's in-app extensibility features can help power users make new fields and put in business logic, among other functions.

As with Public Edition, S/4HANA Cloud Private Edition users are able to access partner-developed content.

Licensing

Users can license S/4HANA Cloud Private Edition as a SaaS product -- that is, by subscription -- or pay for a perpetual license. In the former case, hosting and infrastructure management may be included as part of Private Edition's monthly cost, and companies usually sign up for multiyear contracts.

Users can also deploy Private Edition on the cloud platform of their choice.

Who manages the environment?

S/4HANA Cloud Private Edition users have access to cloud platform options that aren't available for multi-tenant users. Private Edition users can deploy the software on one of the SAP-approved hyperscalers, such as AWS, the Google Cloud Platform or Microsoft Azure.

Many Private Edition users choose to deploy extensions, integrations and other features alongside S/4HANA on the SAP Business Technology Platform, which was previously known as the SAP Cloud Platform. SAP BTP lets users add technologies like machine learning, AI, and advanced analytics tools to complement their ERP implementation.

Unlike the multi-tenant version, Private Edition runs in a dedicated environment, so companies don't share computing resources with other customers.

Suitable implementation scenarios

S/4HANA Cloud Private Edition is suitable for both greenfield implementations, which is an implementation of completely new SAP software, as well as a brownfield or hybrid approach, which is an upgrade of SAP software and can involve migrating from SAP's ECC software. Tools like SAP Readiness Check and Software Update Manager can facilitate migrations from ECC by preserving existing configurations and historical data. Private Edition also allows for a phased migration, which can potentially make it easier to move from ECC to S/4HANA and minimize disruption.

Private Edition also makes it easier to retain existing customizations and extensions. Preserving customizations and extensions can be difficult, or sometimes impossible, with Public Edition. Integrations are also easier to carry over when using Private Edition than with the multi-tenant Public Edition.

The upgrade process

S/4HANA Cloud Private Edition offers more flexibility with upgrades than Public Edition.

Private Edition upgrades occur twice a year, and users have some say over their timing, so companies can potentially delay the disruptions associated with an upgrade process if needed. Organizations that experience seasonal demand fluctuations will likely find that flexibility helpful.

S/4HANA Cloud Private Edition use cases

S/4HANA Cloud Private Edition is best for new SAP users who need all of SAP's functionality and require a lot of flexibility as well.

Organizations that need those extra capabilities but also need a streamlined implementation can use the Rise with SAP framework, which is a combination of tech tools and services that attempt to help companies move to S/4HANA cloud software more easily. While Rise with SAP includes ways to adapt the software to existing company processes, organizations looking for a streamlined implementation may opt to rework their existing business processes to align with SAP's recommended approach instead.

For many organizations, Rise with SAP offers a middle ground between high levels of standardization and too much complexity.

Jim Kofalt spent 16 years at SAP working with SME business applications and was a product manager for integration technology at Microsoft's Business Solutions division. He is currently the president of DX4 Research, a technology advisory practice specializing in ERP and digital transformation.